When starting a small business, you may have difficulty judging the level of sales you should aim for. You know you want to make a profit, but beyond that general goal you need to have a method for measuring your sales progress. You can identify benchmarks that will serve as guidelines for growing your business. These benchmarks will give you a reality check in the midst of all of the excitement of launching your business.

Take your free products out of your calculations. Before you become well known in your industry, you may have to give away products or sell them at a deep discount to attract customers. You have to remain aware that these tactics do not contribute immediately to sales figures and that you will reap the rewards later. In short, you may want to ignore benchmarks during your opening because you are willing to have negative sales to attract customers.

Calculate your break-even point. You can do this in a couple of ways. You can determine a sales level at which you will have paid for your inventory and labor costs. You can also set a higher sales level at which you will have recovered your initial business investment. Both of these levels can serve as benchmarks that are unique to your business. If you determine that your sales are not paying your expenses, you know you are going to have to increase your marketing efforts.

Research industry standards. Make sure you use the correct industry. For example, if you have a retail operation, differentiate the kinds of products you sell from other retail establishments. Similarly, a manufacturing concern might have different benchmarks than another manufacturer depending on the type of product.

Use start-up standards. Discount the industry benchmark you find by allowing for the fact that you are a start-up. Many new businesses don't make a profit in the first year and this is due, in part, to slowly developing sales. Look at start-up benchmarks instead of benchmarks for mature companies and you won't wear yourself out trying to keep up with more established businesses.

Ask other business owners. One way to establish a benchmark is getting off the Internet and doing some footwork. Go to another city and ask a similar business what kind of sales you should expect as a start-up. Make it clear that your business is geographically remote and won't be competing with them. Businesspeople enjoy talking about their successes, and you can establish benchmarks by interviewing experienced owners.

Contact trade associations. These organizations have an interest in the health of their industries and are willing to give you as much information as you want. Many trade organizations keep records of start-ups and can advise you regarding numbers you should look for in your first year.

About the Author

Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.